State Pension Changes – Budget 2016

So What’s New?

The Chancellor announced in his budget on the 16th March that there will be some significant changes to the State Pension and Savings Credits from April 6th this year. Allegedly this is to be a simpler single tier system to replace the current one of additional and basic pensions. So what are those changes and how will they affect us?

No Change for Current Claimants

Firstly, nothing will change if you are already receiving a state pension, or if you commence your pension claim prior to the April 6th cut off date and that includes people who have deferred their claim. So, this will only affect women born after April 5th 1953 and men born after April 5th 1951

How Much?

If you have at least 35 years National Insurance contributions and you reach State Pension age after the 5th of April this year then you will receive £155.65 per week, although the amount is dependant upon the number of years of National Insurance credits that you have earned. Current State Pension basic allowance will increase to £119.30.

Savings Credit Changes

This has been limited by the budget and will depend upon whether you are claiming as a couple or if yours is a single claim. Again, as per the pension changes, if you are already claiming then nothing will change so long as you remain eligible however if your claim commences after 5th April 2016 then you may not be eligible for Savings Credit.

State Pension Statements

Over 55 year old people can ask the government for a State Pension Statement by telephoning the Future Pension Centre on 0345 3000 168 (Office open hours are 8am-6pm Monday to Friday) or you can request an online statement (some registration required) by clicking here. There is also a Text-phone option – 0345 3000 169

For further information from the HM Government website click here. The Pension Advisory Service also carries useful information which you can link to by clicking here.